Given that the Xbox 360 was damn near bulletproof (there have been very few attacks against it, even still), I expect that the next generation is going to be an even bigger step up, not a step backwards. If you can't compromise code running on the device, then you're not going to be able to inject new cert chains and be able to MITM connections or use private servers, as I strongly doubt that they'll mess up those handshakes.

This won't kill homebrew nor piracy, but it's going to put a massive dent in both. Nothing is unbreakable in theory, but when the cost of a break raises to a certain point, it's effectively unbreakable in practice; they're rapidly approaching that point, if they haven't hit it already.

All of this makes me pretty sad, really. I'm no supporter of piracy, and I don't generally use homebrew software, but I'm going to miss the challenge of breaking consoles. I remember sitting in my apartment in San Diego back in early 2006, with bunnie and a couple other guys, modifying shaders on the King Kong demo from the kiosk disc in an attempt to read out memory from the 360 and display it. I didn't have much interaction with the 360 scene after that stuff, but sitting around and coming up with angles of attack with the best and brightest in the console community was just amazingly fun.